A personal injury trust is a positive thing, not a problem.
A trust is created by a legal document, called a trust deed. Trustees are appointed and hold the trust fund separate from your personal money. The trust is an arrangement to allow trustees to hold and use your money for your benefit. Benefit regulations allow you to keep receiving means tested benefits and hold and use your compensation. What’s not to like?
Use your benefits for the basic expenses, then use your compensation direct from the trust as you wish. All you have to do is keep the compensation in the trust separate from your own money. In return for keeping your benefits, which seems fair enough.
There is a lot of nonsense on websites about how to avoid setting up a trust. Using a trust is the only legitimate solution. The other solutions all involve hiding the compensation in some way, which is fraud. Your compensation is not private, as all compensation paid is notified to the Department of Work and Pensions under the compensation recoupment scheme.
The question I am most often asked is, how can the compensation in the trust be used? The trust fund should not be used for the basics for which benefits are intended. Beyond that, the trust fund can be spent and/or invested in any way you could do yourself. How to set up and operate a trust bank account is explained for you.
I always advise the trust bank account and investments should be operated on the basis of at least two trustee signature or approvals. Until recently, that meant a cheque book only account, but some banks will offer online banking for two users. You can read more about accounts for trusts here.
So, there you are. You have a legitimate way to keep receiving benefits and hold and use your personal injury compensation. The law makers accept a compensated person has not won the lottery, the compensation being paid for injury and financial loss, both past and future, so why should they be penalised. I think it is a generous law, so please don’t mess about with the fraudulent alternatives and take advantage of the legitimate route.